Old Mutual Wealth has denied reports that it is considering cancelling a planned initial public offering due to the spiralling costs of a platform technology change.
A Bloomberg report published yesterday claimed the cost of moving the Old Mutual Wealth platform to technology provided by IFDS meant South African parent company Old Mutual was considering selling the business.
In March, Old Mutual announced plans to split up its four businesses. It later confirmed this would see UK-based Old Mutual Wealth become a separately listed company.
An unnamed source close to preparations for the spin off and separate listing told Bloomberg that the burden of upgrading its proprietary platform were pushing the group toward a private sale.
Old Mutual has denied the reports however, and said that its wealth division remains on track to join the London Stock Exchange as a stand-alone business
It said in a statement: ‘As announced in June 2016, as part of the managed separation, Old Mutual’s intention is to deliver Old Mutual Wealth into the hands of its shareholders by way of a demerger and listing on both the London and Johannesburg stock exchanges.
‘No announcement to the contrary has been made.’
The cost of moving to IFDS technology has so far cost Old Mutual Wealth £450 million, according to financial statements published in March.
The project, which began in 2013, was originally due to be completed this year but has now been delayed until 2019.
Old Mutual added that it will give an update on the business on 11 October, when Old Mutual Wealth chief executive Paul Feeney (pictured) is due to meet with potential investors.
Source: CityWire